Should I Work My Way Through College or Quit My Job to Enroll Full-Time?

I am 26 and looking to start attending school full time this fall.
I am also taking some summer classes at a community college to get all
the credits I can before starting. I am also a transfer student with
37 credits from another school I went to right out of high school. I
am currently married and am considering quitting my job to attend
school full time. We would be able to just barely live off my wife’s
income but I’m wondering if the lower income would help by making me
eligible for additional federal and state grants. As of now, I
qualify only for Stafford loans and nothing else. The alternative for me
would be to keep working part time and make about $10,000 a year in
addition to my wife’s $25,000. Do you think it is worth it for me to
keep working and receive no grants, or quit, get some grants, and be
able to focus completely on school?
— John W.

Financial aid formulas are heavily weighted toward income, so quitting
your job will increase your eligibility for need-based financial
aid. In particular, the federal student aid formula has an income
threshold at $31,000 that can have a big impact on aid
eligibility. Students with family income below this threshold who were
eligible to file an IRS Form 1040A or 1040EZ (or who satisfy certain
other criteria) will have their expected family contribution (EFC)
automatically set at zero. Students with a zero EFC qualify for a
full Pell Grant. If your family income just misses the auto-zero-EFC
threshold, you will still qualify for a Pell Grant, although perhaps not
a full Pell Grant.

Note that the financial aid forms ask for information about your
family income during the prior tax year. Since you will be quitting
your job, last year’s income will not be reflective of your ability to
pay during the academic year. You should ask your college for a
professional judgment review to make an adjustment for the drop in
income. Some colleges call this a special circumstances review or
financial aid appeal. Most colleges will make an adjustment to the
income figures on your Free Application for Federal Student Aid
(FAFSA), switching you from last year’s income to an estimate of this
year’s income.

However, since you are in the 15% tax bracket, you will probably net
about $2,500 to $3,500 more after taxes with $10,000 in additional
income than with lower income and a higher Federal Pell Grant. Federal
and state grants may reduce the need to work and let you focus more on
academics, but you may be better off financially if you work
part-time.

Nevertheless, you should take care to balance your work and school
obligations. A study by Public Agenda found that work, school and
family conflicts are the primary reason why many students
drop out of college.
Work conflicts are more likely for students who are employed
full-time as opposed to students who are working part-time. On the
other hand, other studies have shown that money problems are a major
reason why some students drop out of college.

If you decide to work while in college, don’t work more than 12 hours
a week. Working part-time can improve grades by forcing you to learn
time-management skills. But working more than 12 hours a week takes
away too much time from academics.

Students who work 12 or fewer hours a week graduate with Bachelor’s
degrees at above-average rates. Almost three-fifths (59.2%) of
first-year undergraduate students who intend to obtain a Bachelor’s
degree successfully graduate with a Bachelor’s degree within six
years. Nearly two-thirds (65.9%) of those who do not work their first
year graduate with a Bachelor’s degree. But students who work up to
12 hours a week are even more likely to graduate, with nearly
three-quarters (73.3%) of students who work 1-12 hours a week
graduating within six years. Only students who work more than 12
hours a week are less likely to graduate: less than half (47.7%) of those
who work 13-40 hours a week and less than a third (29.6%) of those
who work more than 40 hours a week graduate within six
years. (Among students who work 1-12 hours a week, working fewer
hours increases graduation rates. 76.2% of students who work 1-6
hours a week graduate with a Bachelor’s degree within six years,
compared with 71.5% of students who work 7-12 hours a week.)

These statistics are based on an analysis of data from the 2009
Beginning Postsecondary Students longitudinal study, which tracks
outcomes for 16,700 students who first enrolled in college in 2003-04.